Is your Dallas property tax bill climbing faster than you expected? If you live in your home as your primary residence, the Texas homestead exemption and the 10% cap can lower your taxable value and slow future increases. You want clarity on how to file, when benefits start, and what Dallas-specific changes mean for you. This guide breaks it down step by step so you can protect your savings and avoid common pitfalls. Let’s dive in.
Homestead exemption basics
The residence homestead exemption gives you two key benefits. First, it reduces the taxable value of your home using mandatory and optional local exemptions. You apply with the state form through your local appraisal district, and the Texas Comptroller explains the details and provides Form 50-114 on its property tax exemptions page.
Second, once your homestead exemption is in place, it triggers the appraisal limitation known as the 10% cap. The Comptroller’s guidance on valuing property and the homestead cap explains that this cap limits how much your taxable appraised value can rise each year.
How Dallas’s 10% cap works
Each year, your appraised value for taxes is the lesser of your current market value or last year’s appraised value plus 10% plus the value of any new improvements. The 10% limit applies only after your homestead exemption is active. The Comptroller details the formula on its valuing property page.
Here is a quick example. If last year’s appraised value was $200,000 and this year’s market value is $260,000, the capped appraised value would be $220,000, which is last year’s value plus 10% (not counting any new improvements). A Central Appraisal District example shows the same math in plain language on this explainer.
When the cap starts and ends
The cap begins on January 1 of the year after you first qualify for the homestead exemption. It ends on January 1 of the year after you no longer qualify. The Comptroller outlines these timing rules on its valuing property guidance.
New improvements, like an addition or a new pool, are added outside the 10% limit. Ordinary repairs and maintenance are not treated as new improvements per the Comptroller’s cap guidance.
How to apply in Dallas County
In Dallas County, the Dallas Central Appraisal District (DCAD) administers homestead exemptions. You submit the state Application for Residence Homestead Exemption, Form 50-114, with supporting documents. The Texas Comptroller provides the form and instructions on its exemptions page.
Typical documentation includes the completed form, a Texas driver’s license or Texas ID that shows the same address as the property, and proof of ownership if requested. File by April 30 for the current tax year. The Comptroller notes that late applications may be allowed in limited cases, but filing on time helps ensure you receive the benefit for the current year. See filing guidance on the Comptroller’s exemptions page.
Deadlines, verification and protests
Texas now requires appraisal districts to verify homestead exemptions at least once every five years. Respond to any verification request from DCAD promptly or you could lose the exemption. You can read about the statewide requirement and local implementation in this overview of the five-year verification law and local reporting that warns homeowners to watch for verification notices.
If you disagree with your market value on your Notice of Appraised Value, you can file a protest with DCAD’s Appraisal Review Board. The deadline is often mid-May or 30 days after the notice date, whichever is later. KERA outlines the protest timing in a Dallas-area explainer. Protesting value and filing a homestead exemption are separate actions.
Local Dallas benefits in 2025
The City of Dallas has adopted a 20% general homestead exemption for city taxes, which is the state maximum for a percent-based exemption. In June 2025, the City also increased the over-65 or disabled exemption for the City of Dallas portion of the tax bill to $175,000, effective for the 2025 tax year. See the City’s announcement in this press release. You still apply through DCAD using the state form provided by the Texas Comptroller.
Buying or selling a Dallas home
If you buy a home that had a homestead exemption, you generally need to file your own application after you move in and make it your primary residence. The interaction between prior exemptions, proration, and the cap can be nuanced, so it is smart to apply as soon as you occupy the home and ask DCAD questions as needed. For a plain-language overview, see this guide on buying a home with an existing homestead exemption.
You do not reapply every year, but under the five-year verification law, you may receive a request to verify your exemption. Respond on time. A Central Appraisal District FAQ summarizes the rule and common issues in its homestead FAQs.
Quick checklist for Dallas homeowners
- Confirm your homestead status on your DCAD property account page.
- File Form 50-114 with a Texas ID that matches the property address. Keep copies.
- Watch your mail and online account for DCAD five-year verification notices and respond quickly.
- If your market value looks too high, prepare evidence and file a protest by the deadline. KERA explains the protest timeline.
Common pitfalls to avoid
- Using an ID that does not show the property’s address or leaving parts of the form incomplete.
- Claiming more than one residence homestead.
- Ignoring five-year verification letters, which can result in removal of your exemption. A CAD FAQ outlines these issues in its homestead FAQs, and local news has urged Dallas owners to watch for verification mailers.
Get guidance tailored to your move
Property tax rules can affect your bottom line when you buy or sell. If you want a clear plan for timing your homestead filing, understanding the 10% cap, or positioning your home sale for maximum value, connect with The Luxury Collective Group for boutique, expert guidance in Dallas and the North Texas suburbs.
FAQs
What is the difference between the Dallas homestead exemption and the 10% cap?
- The exemption lowers your taxable value through state and local benefits, while the 10% cap limits how much your taxable appraised value can increase each year once your homestead is in place, as outlined by the Texas Comptroller.
When does the 10% cap start after I apply in Dallas County?
- The cap begins on January 1 of the year after you first qualify for the homestead exemption, per the Comptroller’s guidance.
Does the 10% cap stop my property taxes from going up?
- Not always; tax rates can change and new improvements are added outside the cap, so your total tax bill can still rise even though the cap slows taxable value growth per the Comptroller’s overview.
How do additions or renovations affect the cap in Dallas?
- New improvements are added at full market value outside the 10% limit, while ordinary repairs are not treated as new improvements under the Comptroller’s rules.
What if I miss the April 30 homestead filing deadline?
- Texas allows some late applications under specific rules, but filing by April 30 is best for current-year benefits; see the Comptroller’s exemptions page for guidance.
I bought a Dallas home with an existing homestead exemption; do I need to apply?
- Yes, exemptions are tied to ownership and occupancy, so you should file your own application after you move in as your primary residence; here is a helpful plain-language explainer.
